AST SpaceMobile Trades at a Premium: Time to be Cautious?

AST SpaceMobile ASTS has effectively deployed its initial set of five commercial satellites in low earth orbit. Named Bluebird, these satellites feature over 5,600 cells within the premium low-band spectrum. In second half of 2025, it is also set to launch its next generation of commercial “Block 2 BlueBird (BB) satellites,” featuring communication arrays of up to 2,400 square feet. This will be a major step forward in establishing a robust space based broadband connectivity system.

However, From a valuation standpoint, AST SpaceMobile trades at a forward price-to-sales ratio of 67.86, well above the industry. Owing to the stock’s premium valuation, we believe investors should remain cautious as macroeconomic factors, or economic downturns can significantly impact overvalued stocks like ASTS.

The company is working with leading edge direct-to-smartphone satellite communication technology. Investors are betting big on the future potential of this technology. Strategic collaboration with prominent telecom companies including AT&T, Verizon and Vodafone are driving optimism. 

However, the company is navigating though a dynamic macroeconomic environment. Volatility in the capital markets, imposition of tariffs and geopolitical conflicts, negatively impact AST SpaceMobile’s operations. These factors often led to continued fluctuations in satellite material prices, increasing capital costs and putting pressure on margin. The continuous increase in research and development expenses are also straining margin. The company's research and development costs surged 67.6% during the first quarter 2025.

How Are Competitors Faring?

ASTS operates in a highly competitive mobile satellite services market. The company faces severe competition from existing and new industry leaders like SpaceX’s Starlink and Globalstar GSAT, which are developing satellite communications technology using LEO constellations. Globalstar is a prominent player in satellite voice and data services market with a presence in 120 countries. The company is steadily advancing development of the C-3 Mobile Satellite System, which aims augment mobile satellite services particularly in remote regions. Globalstar currently trades at a forward price-to-sales ratio of 11.79, well above the industry’s 0.82.

Viasat, Inc. VSAT is also ramping up investments in the development of its revolutionary ViaSat-3 broadband communications platform. The ViaSat-3 constellation is intended to provide high-speed and high-capacity connectivity to expand coverage and help bridge the digital divide in areas with limited internet access. VSAT currently trades at a forward price-to-sales ratio of 0.44, well below the industry’s 3.44.

ASTS’ Price Performance and Estimates

Over the past year, shares of AST SpaceMobile have skyrocketed 262.8% compared with the industry’s growth of 37.7%.

Earnings estimates for 2025 have moved up 3.85% to a loss of $1 over the past 60 days, while the same for 2026 has decreased 9.76% to a loss of 90 cents.

AST SpaceMobile stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This article originally published on Zacks Investment Research (zacks.com).

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